Things to Avoid While Purchasing a Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. It's wise to remember that until you get the keys, your lender is watching you very closely. We have listed some actions below you will want to stay away from when waiting for your loan to close.

Don't make expensive purchases. Although you may be listing ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to buy big items can also create a bad idea: many lending institutions consider your cash on hand when approving your mortgage loan.

Don't look for a new career. Your recent work history should show stability. Finding a new career (particularly one with a bump in salary) may not hinder your ability to qualify for your mortgage loan. However, if you switch careers before approval, your process could fail or be stalled.

Don't switch your accounts to a new bank or move around your money. Bank statements from recent months for your accounts (checking, savings, money market, and others) will be analyzed as the lender considers your mortgage application. To avoid potential fraud, most loans want detailed paperwork to verify the source of all cash. Switching banks or transferring finances to another account - no matter the reason - may hinder the documentation of your accounts.

Don't give funds directly to your seller (usually in the case of of "for sale by owner") to be used as a "good faith" deposit. Until the sale is complete, the good faith deposit actually belongs to you. Your seller might not know that this earnest money must be used for your expenses at closing. Find an attorney or other neutral person who can hang on to the money or put it in a trust account until closing. The purchase agreement should dictate who keeps the money if the transaction does not go through.

Amity Mortgage LLC can answer questions about these "Don'ts" and many others. Give us a call at 2037296681.